Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

hello - I need help with the required questions. 4. Award: 10.00 points The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a

hello - I need help with the required questions.

image text in transcribedimage text in transcribedimage text in transcribed
4. Award: 10.00 points The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow. Dirt Mountain Racing Total Bikes Bikes Bikes Sales $ 935,000 $ 268,000 S 410,000 $ 257,000 Variable manufacturing and selling expenses 478,000 119,000 201,000 158,000 Contribution margin 457,000 149,000 209,000 99,000 Fixed expenses: Advertising, traceable 69,600 8.200 40,600 20,800 Depreciation of special equipment 43,600 20,900 7,500 15,200 Salaries of product-line managers 115,200 40,800 38,500 35.900 Allocated common fixed expenses' 187,000 53,600 82,000 51,400 Total fixed expenses 415,400 123,500 168,600 123,300 Net operating income (loss) S 41.600 $ 25.500 $ 40,400 $ (24,300) *Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out. Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 4/tab 14. Award: 10.00 points The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Dirt Mountain Racing Total Bikes Bikes Bikes Sales 935,000 $ 268,000 $ $ 410,000 $ 257,000 Variable manufacturing and selling expenses 478,000 119,000 201,000 158,000 Contribution margin 457,000 149,000 209,000 99,000 Fixed expenses: Advertising, traceable 69,600 8,200 40,600 20,800 Depreciation of special equipment 43,600 20,900 7,500 15,200 Salaries of product-line managers 115,200 40,800 38,500 35,900 Allocated common fixed expenses' 187,000 53,600 82,000 51,400 Total fixed expenses 415,400 123,500 168,600 123,300 Net operating income (loss) $ 41,600 $ 25,500 40,400 $ (24,300) "Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out. Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes ONo 4/tab 24. Award: 10.00 points The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Dirt Mountain Racing Total Bikes Bikes Sales Bikes $ 935,000 $ 268,000 $ 410,000 $ 257,000 Variable manufacturing and selling expenses 478,000 119,000 201,000 158,000 Contribution margin 457,000 149,000 209,000 99,000 Fixed expenses; Advertising, traceable 69,600 8,200 40,600 20,800 Depreciation of special equipment 43,600 20,900 7,500 15,200 Salaries of product-line managers 115,200 40,800 38,500 35,900 Allocated common fixed expenses 187.000 53,60 82,000 51,400 Total fixed expenses 415,400 123,500 168,600 123,300 Net operating income (loss) 41,600 $ 25,500 $ 40,400 $ (24,300) "Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long- run profitability of the various product lines. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) 0 0 o Traceable fixed expenses Total traceable fixed expenses Product line segment margin (loss) o S 4/tab 3 Net operating income (loss)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Lawrence A. Tomassini

4th Edition

0072994029, 9780072994025

More Books

Students also viewed these Accounting questions